Zakat or (Zakah) is one of the major religious duties
in Islam. Literally, Zakah means to 'purify'. It refers to the purification
of a Muslim's wealth and soul. Wealth purification denotes the mobilization
of assets for the purpose of financial growth and justified distribution.
Purification of the soul implies freedom from hatred, jealousy, selfishness,
uneasiness and greed. Other Quranic connotations include the purification
of sin. Technically, Zakah is a fixed proportion collected from the surplus
wealth and earnings of a Muslim. It is then distributed to prescribed
beneficiaries and for the welfare as well as the infrastructure of a Muslim
society in general. This contribution is made payable by a Muslim once
in every lunar year (Islamic Calendar/Hijri). Zakah is paid on the net
balance after a Muslim has spent on basic necessities, family expenses,
due credits, donations and taxes. Every Muslim male or female who at the
end of the Hijri year is in possession of the equivalent of 85 grams of
gold or more in cash or articles of trade, must pay his or her Zakah at
the minimum rate of 2.5%. Zakah has a deep humanitarian and social-political
value. This religious act prevents the hoarding of wealth and advocates
solidarity amongst Muslims because excessive wealth is distributed amongst
the poor. The paying of Zakat also helps purify one's soul and encourages
a Muslim to have gratitude towards God's bounties.

As it has been mentioned, Zakah is mentioned vis-à-vis
with Salat (prayer) in 30 verses of the Quran. It was first revealed in
Surat Al Muzzamil: 20;

".... and establish regular prayers and give regular
charity; and loan to Allah a beautiful loan. And whatever good ye send
forth for your souls, ye shall find it in Allah's presence, Yea, better
and greater in reward and seek ye the grace of Allah: for Allah is oft-forgiving,
most Merciful."

In another verse, Allah declares that those who pay Zakah,
are included within the Muslim society (Jama'atul Islamiah) - Al Taubah: 11

"But (even so),
if they repent, establish regular prayers, and practice regular charity,
they are your brethren in Faith: (thus) do we explain the Signs in detail,
for those who understand."

GOD Most High said: They
were enjoined only to worship God, sincere in their faith in Him alone
- and of upright religion and to establish the Salat and the Zakat. Such
is the upright religion, [98:5] and: Those who lay up treasures of gold
and silver and spend them not in the way of God; give them the news of
a painful punishment, on the Day when that [wealth] will be heated in
hellfire, and their foreheads and their sides and their backs branded
therewith: "This is the treasure which you laid up for yourselves! Taste,
then, your hoarded treasure!" [9:34-35] and: Let not those who are miserly
with what God has given them of His bounty think that this is good for
them. Rather, it is bad for them. That which they withhold shall be hung
around their necks on the Day of Arising. [3:180]

Bukhari and Muslim relate on the authority of Ibn 'Abbas (Radiyallahu 'Anhu) that the Messenger of God
(Sallallahu 'Alayhi Wa Sallam) sent Mu'adh to the Yemen he told him, "You are going to a people who have a Scripture,
so call them to testify that there is no deity but God, and that I am the Messenger of God. If they respond to this,
then teach them that God has imposed five Salats upon them in every day. If they respond to this, then teach them that God
has imposed upon them a charity to be taken from the wealthy amongst them and given to their poor. If they respond to this,
then beware of taking any more of their wealth! Beware also of the prayer of the oppressed, for there is no veil between such
prayer and God."

Bukhari relates on the
authority of Abu Hurayra that the Prophet (Sallallahu 'Alayhi Wa Sallam)
said, "Whoever is given wealth by God and does not pay the Zakat due thereupon
shall find that on the Day of Arising it is made to appear to him as a
hairless snake with two black specks, which chains him, and then seizes
him by his jaw and says, 'I am your wealth! I am your treasure!'" Then
he recited the verse, 'Let not those who are miserly with what God has
given them of His bounty think that this is good for them. Rather, it
is bad for them. That which they withhold shall be hung around their necks
on the Day of Arising.' [3:180]

Conditions for
Zakah

Several conditions must be fulfilled
before Zakah can be paid. These conditions are necessary as Zakah can
only be applied on those who are of legal age and who own enough assets.
These conditions are categorized into two broad categories, namely performer
and asset.

Zakah Performer Muslim

Every Muslim who is of a certain age and owns enough assets is required to pay Zakah.

Zakah Asset

Full Ownership a Muslim will only be required to
pay Zakah if he or she has full and legal ownership of an asset.

Zakah is payable only on those
assets that are acquired for the purpose of creating or generating wealth.
Some examples of this type of assets are livestock or crops that are
traded or sold, inventory of goods used for trading, and investments
such as gold or securities that have potential for appreciation in value.
However, Zakah is not payable in the case of fixed assets such as buildings,
if they are not subjected to "capital circulation".

Assets that exceed
a minimum value

Zakah need only be paid on those
assets that exceed a minimum value. This minimum value is calculated based
on the market price of 85 grams of gold or 595 grams of pure silver. This
minimum value is termed Nisab. The Islamic Fiqh and Research Councils,
as well as Jumhur (majority) of Ulama' recommend that gold be used as
the basis for the calculation of nisab.

Completion of Haul

Haul is defined as the completion period for a Zakah
asset. The length of time for haul is one Islamic or Hijri year (1 year
Hijri = 354.5 days, 1 year Solar = 365.25 days). Zakah is only payable
on assets that have been held for at least this period.

Beneficiaries of Zakah

The Holy Quran (Surat Al-Tauba: 60) classifies
the due recipients of Zakat under the following eight categories.

"Zakat is for the poor, and the needy and those who are employed to administer
and collect it, and the new converts, and for those who are in bondage,
and in debt and service of the cause of Allah, and for the wayfarers,
a duty ordained by Allah, and Allah is the All-Knowing, the Wise".

Zakah can only be distributed to any of the eight eligible beneficiaries
(Asnaf) that are mentioned in the Quran, Al Taubah: 60. However, priority
should be given to the poor and needy. Where there is no central authority
to administer Zakah, it can be paid directly to the needy.

"Alms are for the poor and the needy, and those employed to administer
the (funds); for those whose hearts have been (recently) reconciled (to
the truth); for those in bondage and in debt; in the cause of Allah; and
for the wayfarer: (thus is it) ordained by Allah, and Allah is full of
knowledge and wisdom." At Taubah : 60

The poor (Faqir/ plural: Fuqara')

Those without any means of livelihood and material possessions.

The needy (Miskeen/ plural: Masakeen)

Those without sufficient means of livelihood to meet their basic necessities. For instance, those who, although may have a job,
a house and a car, but whose income is below the minimum requirement.

The administrators of Zakah (Amil)

Those appointed to manage and administer Zakah. This category is sub-divided into the following categories:

Group of people who go out to the society and determine those who fall Fuqara' and Masakeen categories.

Those who collect the Zakah money.

The accountant of the Zakah money.

The administrator, manager, clerical worker or secretary who puts the files in order.

Those who handle Zakah distributions.

The auditor who audits overall Zakah management and administration.

The sympathizers (Muallaf)

Those who are inclined to enter or have already converted to Islam.

To free slaves (Riqab)

Zakah can also be used to free slaves or captives.

Those who are in debt (Gharimin)

Zakah can be used to pay off the debts of a person who has borrowed to pay for basic necessities so that he/she
can lead a normal life. Zakah can also be distributed to those in financial difficulties e.g. bankruptcy due to
the loss of employment and heavy debt.

For the cause of Allah (Fisabillillah)

Zakah can be used to finance any form of struggle or work for the love of Allah. The following examples fall under
this category, e.g. Da'wah; building & developing society's infrastructure; defending Muslims, who are being oppressed;
assisting poor travelers and sponsoring a student's educational expenses.

Those who are stranded during a journey (Ibn-u Sabil)

Zakah can also be used to help a traveler facing difficulties in continuing his journey due to reasons such as loss
of money or the break down of his vehicles, the repair of which he cannot afford.

Types of Zakah

Zakah FitrZakah Fitr is a one off payment that is made once
in every Muslim Hijri calendar year at any time between the first day
of the month of Ramadan and the first day of Shawal. All Muslims are
obliged to pay this, regardless of their age, status or wealth. The
amount of Zakah payable is approximately 3kg of staple food in the relevant
country or an amount of money that is equivalent to the price of the
food.Zakah Al-Mal (on wealth)Zakah Al-Mal is an annual payment based on the amount of wealth owned by a Muslim individual or organization.
This payment is obligatory upon any Muslim individual or organization that has completed the requirement of Nisab
(minimum taxable amount) and Haul (one Muslim Hijri calendar year). The payment is 2.5% out of the total wealth deemed for Zakah.